Safeway to Pay $30M in Grocery Delivery Pricing Class Action

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Safeway Inc. has been found liable for $30 million in a price parity class action lawsuit which alleged the supermarket chain charged more for products sold through its online grocery delivery service than at a physical store.

Lead plaintiff Michael Rodman filed the Safeway breach of contract class action lawsuit in 2011 when after using the online delivery service he discovered that prices were higher than at his local Safeway store.

In his grocery delivery class action lawsuit, Rodman alleges Safeway marked up each item by 10 cents per dollar. For example, an item that would cost  $1 to $1.99 at a Safeway store would be priced 20 cents higher online, and an item that would cost $2 to $2.99 at a Safeway store, would be priced 30 cents higher online.

According to the Safeway delivery markup class action lawsuit, the terms and conditions of the supermarket’s online contract with customers “promised, with certain exceptions, that the prices charged for on Safeway.com would be the same as the prices charged in the physical store from which the groceries were selected and delivered.”

By Nov. 15, 2011, Safeway revised the terms online to include the following information about potential price differences: “Please note before shopping online at [Safeway.com] that online and physical store prices, promotions, and offers may differ.” However, plaintiff Rodman claims that Safeway did not contact any registered online delivery members about the amended terms.

U.S. District Judge Jon S. Tigar ruled that Class Members will be entitled to the aggregate amount of the difference between the online store prices and physical store prices. This equates to $30,979,262.

The court certification order noted that Safeway’s defense that Class Members “knowingly and willingly choose to pay an additional fee that they were under no obligation to pay under the terms of the contract” was irrational. The judge found that there was no evidence to support that Class Members knew of the price increase yet continued to place online delivery orders regardless.

However, on a separate motion, Judge Tigar ruled that Safeway was not liable for online purchases from customers prior to 2006 because at that time the website service was operated by a third-party vendor.

The federal judge certified the Safeway class action lawsuit to include all Class Members who are U.S. residents who registered to purchase groceries through Safeway.com at any time prior to Nov. 15, 2011, and made one or more purchases subject to the price markup implemented on or about April 12, 2010.

Class Members who used Safeway.com multiple times during the class period can file multiple claims. The Safeway class action lawsuit will let individuals financially recover the total amount from each purchase made, meaning the supermarket’s liability is based on per-claim, rather than per-individual.

For more information about the Safeway grocery delivery class action lawsuit, click here or visit www.SafewayGroceryDeliveryClassAction.com.

Rodman is represented by Steven A. Schwartz and Timothy N. Mathews of Chimicles & Tikellis LLP and James C. Shah and Scott R. Shepherd of Shepherd Finkelman Miller & Shah LLP.

The Safeway Grocery Delivery Overpricing Class Action Lawsuit is Rodman v. Safeway Inc., Case No. 3:11-cv-03003, in the U.S. District Court for the Northern District of California.
UPDATE: On Oct. 4, 2016, Safeway was ordered to pay $516,000 in discovery sanctions to a Class of grocery shoppers who claim they overpaid for online purchases.

UPDATE 2: December 2017, a $42 million judgment against Safeway is now being distributed to qualifying Class Members who were allegedly overcharged for online grocery delivery service. Learn more here.

UPDATE 3: On July 15, 2019, Top Class Actions viewers started receiving checks in the mail from the Safeway online delivery judgement worth as much as $2,289.83. Congratulations to everyone who got PAID!